PARSIPPANY, N.J., Feb. 24, 2015 /PRNewswire/ -- Pinnacle Foods Inc.
(NYSE: PF) today reported its financial results for the fourth quarter
and full year ended December 28, 2014, delivering significant growth in
diluted earnings per share for the year. The Company also provided its
outlook for fiscal 2015, including Adjusted diluted earnings per share
in the range of $1.86 to $1.91, representing growth of 7-10%.

* Delivered 13% growth in Adjusted EBIT and grew Adjusted EBITDA by
11% to $504 million

* Grew Adjusted pro forma diluted EPS by 14.5% to $1.74,
representing the top of the Company's guidance range

* Acquired Garden Protein International Inc., the rapidly-growing
manufacturer of the plant-based protein brand gardein, and the
Centralia, Illinois manufacturing site of Gilster Mary Lee, the primary
manufacturing operation for Duncan Hines

* Drove net cash provided by operating activities to approximately
$400 million, excluding the benefit of the termination fee totaling $153
million, net of expenses, associated with the terminated merger
agreement with The Hillshire Brands Company

* Reduced debt by approximately $200 million and achieved a year-end
net leverage ratio of 4.23x

Commenting on the results, Pinnacle Foods Chief Executive Officer
Bob Gamgort stated, "We are pleased with the strong results we
delivered in our second year as a public company -- achieving
double-digit EPS growth, expanding gross margin and generating
exceptional cash flow that enabled us to reduce leverage and return over
$100 million in cash to our shareholders through dividends. We navigated
successfully through an eventful year in which we made two modest, but
highly strategic, acquisitions and managed through the disruption of a
terminated merger agreement, while continuing to build market share in a
highly competitive industry. The 2015 guidance that we are providing
today reflects the confidence we have in the ability of our business
model and team to continue to create shareholder value."

Full-Year Fiscal 2014 Results

Consolidated net sales for the year increased 5.2% to $2.59 billion,
compared to $2.46 billion in fiscal 2013, reflecting a 6.2% benefit from
acquisitions and a 0.3% increase from higher volume/mix, partially
offset by lower net price realization of 1.1% and unfavorable foreign
currency translation of 0.2%.

Gross profit for the year increased 4.1% to $681.2 million, or 26.3%
of net sales, compared to gross profit of $654.2 million, or 26.6% of
net sales, in 2013. Excluding items affecting comparability, gross
profit advanced 7.1% to $711.3 million and, as a percentage of net
sales, gross profit expanded by approximately 50 basis points to 27.5%.
This performance largely reflected strong productivity savings and
favorable product mix, partially offset by the impacts of inflation and
lower net price realization.

EBIT advanced significantly to $512.3 million for the year, compared
to $293.0 million in 2013, significantly driven by the Hillshire merger
termination fee. Excluding this fee and other items affecting
comparability, EBIT increased 13% to $423.4 million, compared to $374.2
million in 2013, primarily reflecting the growth in net sales, gross
margin expansion and the benefit of a vacation policy change amounting
to $6.5 million in the fourth quarter of 2014 to more closely align with
market practices. Partially offsetting these factors was higher consumer
marketing investment.

Adjusted EBITDA advanced 11.4% to $504.0 million in 2014, compared
to $452.4 million in 2013. Adjusted EBIT and Adjusted EBITDA are
Non-GAAP measures defined below under "Non-GAAP Financial
Measures" and reconciled to GAAP measures in the tables that
accompany this release.

GAAP net earnings advanced significantly to $248.4 million in 2014,
compared to $89.3 million in 2013, driven by the benefit of the merger
termination fee. On a pro forma basis excluding items affecting
comparability, net earnings advanced approximately 15% to $203.4
million, or $1.74 per diluted share, compared to net earnings of $177.4
million, or $1.52 per diluted share, in the year-ago period. This
performance reflected the strong growth in EBIT and a lower effective
tax rate, partially offset by higher interest expense associated with
the Wish-Bone acquisition.

Net cash provided by operating activities increased significantly to
$551 million in 2014, or approximately $400 million excluding the
benefit of the merger termination fee, compared to $262 million in 2013,
driven by the growth in net earnings and improvement in working
capital.

Fourth Quarter Consolidated Results

Net sales in the fourth quarter of 2014 decreased 0.6% to $705.3
million, compared to net sales of $709.3 million in the fourth quarter
of 2013. This performance reflected a 1.0% benefit from the Gardein
acquisition and a 0.2% increase from higher net price realization, more
than offset by lower volume/mix of 1.6%, driven by the expected decline
at the Specialty Foods segment, and unfavorable foreign currency
translation of 0.2%.

North America Retail net sales increased 0.9% to $622.7 million in
the fourth quarter of 2014, compared to net sales of $617.2 million in
the year-ago period. This performance reflected a 1.1% benefit from the
Gardein acquisition and a 0.2% increase from higher net price
realization, partially offset by lower volume/mix of 0.2% and
unfavorable foreign currency translation of 0.2%.

Gross profit decreased 4.6% to $188.4 million, or 26.7% of net
sales, in the fourth quarter of 2014, compared to gross profit of $197.6
million, or 27.9% of net sales, in the year-ago period. Excluding items
affecting comparability, gross profit advanced 1.6% to $207.5 million
and, as a percentage of net sales, gross profit expanded by
approximately 60 basis points to 29.4%. This performance reflected the
benefits of continued strong productivity, slightly higher net price
realization and the impact of $2.7 million from the aforementioned
vacation policy change, partially offset by higher-than-anticipated
inflation associated with trucking and rail capacity constraints.

EBIT declined to $93.6 million in the fourth quarter of 2014,
compared to $116.5 million in the fourth quarter of 2013. This decline
was driven by items affecting comparability, including a fourth quarter
non-cash compensation charge of approximately $24 million associated
with the accelerated vesting of equity compensation triggered by the
decline in Blackstone ownership following the secondary offering in
November. Excluding this charge and other items affecting comparability,
EBIT increased 7.5% to $142.5 million in the fourth quarter of 2014,
compared to $132.5 million in 2013, driven by the growth in Adjusted
gross profit and lower selling, general and administrative expenses,
driven by the impact of $3.8 million from the vacation policy change.
Adjusted EBITDA advanced 6.6% to $163.1 million in the fourth quarter of
2014, compared to $153.0 million in the fourth quarter of 2013.

Net interest expense for the quarter, excluding items affecting
comparability, declined 8.0% to $22.4 million, compared to $24.3 million
in the year-ago period, primarily driven by the previously-disclosed
$200 million debt reduction in the third quarter and the related 25
basis point term loan interest rate step-down. On the same basis, the
effective tax rate for the quarter declined to 37.4%, compared to 39.0%
in the year-ago period, due to changes in federal legislation and a
reduction in state taxes.

Net earnings in the fourth quarter declined to $36.1 million,
compared to $55.7 million in the year-ago period. Excluding items
affecting comparability, net earnings for the fourth quarter increased
approximately 14% to $75.2 million, or $0.64 per diluted share, compared
to net earnings of $66.0 million, or $0.57 per diluted share, in the
year-ago period.

Net cash provided by operating activities totaled $138 million in
the fourth quarter of 2014, compared to net cash provided by operating
activities of $121 million in the year-ago quarter.

Fourth Quarter Segment Results

Birds Eye Frozen

Net sales for the Birds Eye Frozen segment increased 4.9% to $317.4
million in the fourth quarter of 2014, compared to $302.4 million in the
prior-year period. This performance reflected a 2.3% benefit from the
Gardein acquisition, higher volume/mix of 2.0% and higher net price
realization of 0.6%. Growth in the Birds Eye frozen vegetable and
Voila!skillet meal businesses, reflecting continued distribution
expansion and strong growth of Voila! Family Size varieties, along with
strength of Hungry-Man frozen entrees, driven by success of the new
Hungry-Man Selects line, was partially offset by lower sales of Mrs.
Paul's and Van de Kamp's frozen prepared seafood.

EBIT for the Birds Eye Frozen segment declined approximately 20% to
$54.3 million in the fourth quarter of 2014, compared to $68.2 million
in fourth quarter of 2013. Excluding items affecting comparability, EBIT
increased 2.8% to $71.0 million, driven by the growth in net sales,
productivity savings and the vacation policy change, partially offset by
higher logistics costs and packaging investments.

Duncan Hines Grocery

Net sales for the Duncan Hines Grocery segment declined 3.0% to
$305.4 million in the fourth quarter of 2014, compared to $314.7 million
in the year-ago period, due to lower volume/mix of 2.1%, reduced net
price realization of 0.4% and unfavorable foreign currency translation
of 0.5%. Strong growth in Vlasic pickles, including the introduction of
Vlasic Bold & Spicy, was more than offset by lower sales of Duncan
Hines baking products, due to category softness, despite the brand
growing market share for the quarter and the year.

EBIT for the Duncan Hines Grocery segment advanced approximately 9%
to $51.5 million in the fourth quarter of 2014, compared to $47.0
million in the year-ago period. Excluding items affecting comparability,
EBIT advanced 10% to $68.4 million, driven by productivity savings,
lower marketing spending and the vacation policy change, partially
offset by the decline in net sales and higher logistics costs.

Specialty Foods

Net sales for the Specialty Foods segment decreased 10.3% to $82.6
million in the fourth quarter of 2014, compared to $92.1 million in the
fourth quarter of 2013, due to lower volume/mix of 10.9%, largely
reflecting the timing of private label canned meat sales versus the
prior year, partially offset by higher net price realization of
0.6%.

EBIT for the Specialty Foods segment decreased approximately 15% to
$7.5 million in the fourth quarter of 2014, compared to $8.9 million in
the fourth quarter of 2013. Excluding items affecting comparability,
EBIT advanced 1.6% to $9.1 million, largely driven by productivity
savings and the vacation policy change, partially offset by the decline
in net sales and higher logistics costs.

Outlook for 2015

The Company expects Adjusted diluted EPS for 2015 to be in the range
of $1.86 to $1.91, excluding items affecting comparability. This
outlook, which represents 7-10% growth, includes the following
assumptions:

* Input cost inflation for the year is estimated at approximately
3.0% to 3.5%, with first quarter inflation estimated to be the highest
of the year.

* Productivity for the year is estimated in the range of 3.0% to
4.0% of cost of products sold, with savings again expected to be greater
in the second half of the year versus the first half.

* Interest expense for the year is estimated to approximate $90
million, largely reflecting the benefits of debt reduction in 2014 and
the related interest rate step-down.

* The effective tax rate for the year is estimated at 38.0%.

* The weighted average diluted share count for the year is estimated
at approximately 117 million.

Conference Call Information

The Company will host an investor conference call on Tuesday,
February 24, 2015 at 8:30AM (ET) to discuss the results of the quarter.
To access the call, investors and analysts can dial (866)-802-4355 in
the U.S. and Canada or (703) 639-1323 from outside the U.S. and Canada
and reference conference name: Pinnacle Foods Q4 Earnings Call. A replay
of the call will be available, beginning February 24, 2015 at 1:00 PM
(ET) until March 11, 2015, by dialing (888) 266-2081 in the U.S. and
Canada or (703) 925-2533 from outside the U.S. and Canada and
referencing Access Code 1642543. Access to a live audio webcast and
replay of the event will be available in the Investor Center of the
Company's corporate website at www.pinnaclefoods.com.

This release may contain statements that predict or forecast future
events or results, depend on future events for their accuracy or
otherwise contain "forward-looking information." The words
"estimates," "expects," "contemplates,"
"anticipates," "projects," "plans,"
"intends," "believes," "forecasts,"
"may," "should," and variations of such words or
similar expressions are intended to identify forward-looking statements.
These statements are made based on management's current
expectations and beliefs concerning future events and various
assumptions and are not guarantees of future performance. Actual results
may differ materially as a result of various factors, some of which are
beyond our control, including but not limited to: general economic and
business conditions, deterioration of the credit and capital markets,
industry trends, our substantial leverage and changes in our leverage,
interest rate changes, changes in our ownership structure, competition,
the loss of any of our major customers or suppliers, changes in demand
for our products, changes in distribution channels or competitive
conditions in the markets where we operate, costs of integrating
acquisitions, loss of our intellectual property rights, fluctuations in
price and supply of raw materials, seasonality, our reliance on
co-packers to meet our manufacturing needs, availability of qualified
personnel, changes in the cost of compliance with laws and regulations,
including environmental laws and regulations, and the other risks and
uncertainties detailed in our Form 10-K filed with the Securities and
Exchange Commission on February 24, 2015 and subsequent reports filed
with the Securities and Exchange Commission. There may be other factors
that may cause our actual results to differ materially from the
forward-looking statements. We assume no obligation to update the
information contained in this announcement, except as required by
applicable law.

Accrued additions to Plant assets at December 28, 2014 were $25,763.
As of December 29, 2013 they were not significant.

Non-GAAP Financial Measures

Pinnacle Foods Inc. uses the following non-GAAP financial measures
as defined by the Securities and Exchange Commission in our financial
communications. These non-GAAP financial measures should be considered
in addition to the GAAP reported measures, should not be considered
replacements for the GAAP measures and may not be comparable to
similarly named measures used by other companies.

* North America Retail Net Sales

* Adjusted Gross Profit

* Adjusted EBITDA

* Adjusted Earnings before Interest and Taxes (Adjusted EBIT)

* Adjusted interest expense, net

* Adjusted net earnings

* Adjusted earnings per share

North America Retail Net Sales

North America Retail Net Sales is the sum of the net sales of the
Birds Eye Frozen segment and the net sales of the Duncan Hines Grocery
segment. We refer to this to measure net sales performance of our retail
focused branded business in contrast to our Specialty Foods segment
where over the last several years we have de-emphasized certain low
margin foodservice and private label businesses.

Items Impacting Gross Profit and Earnings

Adjusted Gross Profit

Adjusted gross profit is defined as gross profit before accelerated
depreciation related to restructuring activities, certain non-cash
items, acquisition, merger and other restructuring charges and other
adjustments. We believe that the presentation of Adjusted Gross Profit
is useful to investors because it is consistent with our definition of
Adjusted EBITDA (defined below), a measure frequently used by securities
analysts, investors and other interested parties in their evaluation of
the operating performance of companies in industries similar to ours. In
addition, we also use targets based on Adjusted Gross Profit as one of
the components used to evaluate our management's performance.

Adjusted EBITDA

The Company's metric of Adjusted EBITDA, which is used in
creating targets for the bonus and equity portions of our compensation
plans, is substantially equivalent to Covenant Compliance EBITDA under
our debt agreements.

Pinnacle believes that the presentation of Adjusted EBITDA provides
investors with useful information, as it is an important component in
measuring covenant compliance in accordance with the financial covenants
and determining our ability to engage in certain transactions in
compliance with our debt facilities and it is a metric used internally
by our Board of Directors and senior management.

You should not consider Adjusted EBITDA as an alternative to
operating or net earnings (loss), determined in accordance with GAAP, as
an indicator of Pinnacle's operating performance, or as an
alternative to cash flows from operating activities, determined in
accordance with GAAP, as an indicator of cash flows, or as a measure of
liquidity.

Adjusted EBITDA is defined as earnings before interest expense,
taxes, depreciation and amortization ("EBITDA"), further
adjusted to exclude certain non-cash items, non-recurring items and
certain other adjustment items permitted in calculating Covenant
Compliance EBITDA under the Senior Secured Credit Facility and the
indentures governing the Senior Notes. Adjusted EBITDA does not include
adjustments for equity based compensation and certain other adjustments
related to acquisitions, both of which are permitted in calculating
Covenant Compliance EBITDA.

EBITDA and Adjusted EBITDA do not represent net earnings or (loss)
or cash flow from operations as those terms are defined by Generally
Accepted Accounting Principles ("GAAP") and do not necessarily
indicate whether cash flows will be sufficient to fund cash needs. In
particular, the definitions of Adjusted EBITDA in the Senior Secured
Credit Facility and the indentures allow us to add back certain
non-cash, extraordinary, unusual or non-recurring charges that are
deducted in calculating net earnings or loss. However, these are
expenses that may recur, vary greatly and are difficult to predict.
While EBITDA and Adjusted EBITDA and similar measures are frequently
used as measures of operations and the ability to meet debt service
requirements, they are not necessarily comparable to other similarly
titled captions of other companies due to the potential inconsistencies
in the method of calculation.

Our ability to comply with the financial covenants and engage in
certain transactions in compliance with our debt agreements in future
periods will depend on events beyond our control, and we cannot assure
you that we will meet those ratios. A breach of any of these covenants
in the future could result in a default under, or an inability to
undertake certain activities in compliance with, the Senior Secured
Credit Facility and the indentures governing the Senior Notes, at which
time the lenders could elect to declare all amounts outstanding under
the Senior Secured Credit Facility to be immediately due and payable.
Any such acceleration would also result in a default under the
indentures governing the Senior Notes.

Adjusted Earnings Before Interest and Taxes (Adjusted EBIT)

Adjusted Earnings before Interest and Taxes is provided because
Pinnacle believes it is useful information in understanding our EBIT
results by improving the comparability of year-to-year results.

Adjusted Interest Expense, Net

Adjusted interest expense, net is provided to assist the reader by
eliminating mark-to-market adjustments and the charges which result from
refinancing activities.

Adjusted Net Earnings

Adjusted Earnings Per Share

Adjusted net earnings and the related adjusted earnings per share
are provided to present the reader with the after-tax impact of Adjusted
EBIT and Adjusted interest expense, net in order to improve the
comparability and understanding of the related GAAP measures.

(3) Represents expenses related to the write-up to fair value of
inventories acquired in the Wish-Bone acquisition ($6.3MM), along with
unrealized mark-to-market gains +$0.4MM resulting from hedging
activities.

(3) Represents employee stock compensation expense related to
previous awards that vested as a result of the fourth quarter liquidity
event ($23.7MM) and employee equity-based retention incentives related
to the termination of the Hillshire merger agreement ($3.5MM),
unrealized mark-to-market losses ($12.5MM) resulting from hedging
activities, expense related to the write-up to fair value of inventories
acquired in the Gardein acquisition ($0.6MM), and other expenses
($0.7MM).

(4) Represents expenses related to the write-up to fair value of
inventories acquired in the Wish-Bone acquisition ($6.3MM), along with
unrealized mark-to-market gains resulting from hedging activities
+$0.7MM.

(5) Represents premiums paid on the redemption of Senior Notes
($34.2MM) and management/advisory fees and expenses paid to an affiliate
of Blackstone ($19.2MM) which includes the termination of the Blackstone
management fee agreement as a result of the IPO.

Pinnacle Foods Inc.

Reconciliation from Reported to Adjusted Segment Amounts
(unaudited)

For the three months and fiscal years ended December 28, 2014 and
December 29, 2013